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Transcription:

We do what we say we will do. Investor Presentation November 2012 1

Forward-Looking Statements Certain statements in this document are forward-looking statements, which reflect management s current beliefs and expectations regarding the DATA Group s future growth, results of operations, performance, and business prospects and opportunities. Forward-looking statements involve risks and uncertainties related to factors that could cause actual results to differ materially from anticipated results, including those factors discussed in the DATA Group s periodic filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forwardlooking statements prove incorrect, actual results may vary materially from those described in this document. Unless required by applicable securities law, the DATA Group does not intend and does not assume any obligation to update these forwardlooking statements. 2

Agenda DATA s Strategic Growth Plan Q3 & YTD Results Dividends Value proposition and capabilities Industry Dynamics The data supports our growth plan Social Responsibility Investor Highlights Summary 3

DATA at a glance DATA s Strategic Growth Plan Launched February 2011 Our Goals Stabilize financial results in 2011 In 2012 achieve sustainable growth in the markets we have defined Document Management Marketing Communications Expansion into the U.S. with existing clients 4

Why a Strategic Growth Plan? 2007 to 2010 - profitable, but a growth plan was required Growth from 2006 to 2007 due to an acquisition 2007 to 2010 - Revenue and Adjusted EBITDA declined due to recession and technology impact on the printing sector Early 2011 - growth plan was implemented Results were successfully stabilized in 2011 5

DATA S DATA s Growth Plan Plan Launch New Products and Services Through greenfield start up as well as acquisitions Acquisitions will be immediately accretive In the areas of electronic communication, digital print and outsourcing services for Document Management and Marketing Communications Leverage our current assets to sell the new products and services; Strong blue chip customer relationships National presence Experience with developing customized solutions New products and services generally require less capital cost than traditional printing 6

DATA S Growth Plan Strong DATA at Core Fueling a glance New Growth Continuous Improvement in our core business Aggressive sales effort to win market share Winning new business ~ $20 million annually Stable customer relationships Due to our strong customer service ( We do what we say we will do ) and the critical nature of our service Relentless cost savings New savings of ~ $4 million annually 7

DATA S Growth Plan New Mission Statement DATA is a communications management company. We excel by providing exceptionally innovative and reliable marketing and document management solutions in electronic and print media. We begin by understanding our client s needs. Then we combine our talented people and progressive technology to provide solutions that grow revenue, reduce costs and avoid risk. 8

Results of the Strategic Growth Plan 9

New Products and Services Significant change in Senior Management to support the growth strategy New Chief Executive Officer New VP Sales and Marketing (DATA East division) New Chief Information Officer New VP of Digital and Direct Marketing New VP, Strategic Services (DATA East division) New VP, Digital Print Operations & Marketing Campaign Management New VP, Document Process Management 10

New Products and Services Web Based Direct Marketing Launched September 2011 Initial new clients won, good market feedback. Sales funnel building well. Compliments our existing direct mail business. 11

New Products and Services FSA Group and FSA Datalytics Acquired in Q-4 2011 Acquired The Fulfillment Solutions Advantage Inc. ( FSA ) Markham, Ontario based direct marketer Focused on digitally printed direct mail, fulfillment and call center services Acquired a 70% (now 82.35%) interest in FSA Datalytics Canada Inc. ( Datalytics ) Provides data analysis services for smart direct marketing programs, including social media marketing programs Expands DATA s marketing communications services $19.4 million in annual revenue 12

New Capabilities 2012 - Expanding Document Management Capabilities Document Process Outsourcing Excellent fit with current product/service offering and customer base Added revenue opportunity for DATA by adding services that address entire document lifecycle Research indicates strong demand and future category growth Low capital expenditure requirements 13

New Capabilities 2012 - Expanding Marketing Services Capabilities Marketing Campaign Management Software Excellent fit with current product/service offering and customer base Added revenue opportunity for DATA by adding services that address entire marketing campaign workflow Research indicates strong demand and future category growth Low capital expenditure requirements 14

New Business Wins 2012 - Expanding Relationships with key clients Several significant client wins that will impact 2013 Expanding existing client relationships into new areas that are aligned with our growth strategy U.S. expansion based on a North American agreement with a key client 15

C$ Millions 2012 Financial Results Revenue increased 2.74% vs. 2011 Revenue Q3 100.00 75.00 50.00 25.00 78.00 80.14 0.00 Q3 2011 Q3 2012 16

C$ Millions 2012 Financial Results YTD Revenue Q3 300.00 200.00 242.25 249.40 100.00 Q3 2011 Q3 2012 17

C$ Millions 2012 Financial Results Gross Profit up 2.12% vs. 2011 Q3 Gross Profit 30.00 20.00 10.00 19.30 19.71 0.00 Q3 2011 Q3 2012 18

C$ Millions 2012 Financial Results YTD Gross Profit up 6.5% vs. 2011 YTD Q3 Gross Profit 70.0 60.0 50.0 60.1 64.0 Q3 2011 Q3 2012 19

C$ Millions 2012 Financial Results Adjusted EBITDA decrease due to investment in our growth strategy, partially offset by increased Gross Profit. Q3 Adjusted EBITDA 9.0 7.0 5.0 3.0 1.0 6.9 5.8 Q3 2011 Q3 2012 20

C$ Millions 2012 Financial Results Adjusted EBITDA decrease due to investment in our growth strategy, partially offset by increased Gross Profit. YTD Q3 Adjusted EBITDA 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 21.77 19.62 Q3 2011 Q3 2012 21

2012 Financial Results Balance Sheet Selected Balance Sheet Information Sept. 30, 2012 (C$ millions) December 31, 2011 (C$ millions) Cash & Equivalents - 4.05 Net Working Capital 42.67 48.30 Revolving Bank Facility 57.71 60.12 Convertible Debentures 42. 16 42.23 Total shareholder/unitholder equity 106.75 117.36 Senior Debt/Adjusted EBITDA ratio of 1.95 at September 30, 2012 22

Dividends Dividend $0.30 (annualized value) as of January 1, 2013 Monthly dividend of $0.0542 will be paid for November and December 2012 Dividend will be paid quarterly beginning in 2013 Our financial strategy is to; Continue to invest in the growth strategy as we have been doing in 2011 and 2012 Reduce debt to achieve a healthier and more sustainable balance sheet Be positioned to make strategic acquisitions Maintain a dividend payout to DATA Group's shareholders over the longer term 23

Value Proposition and Capabilities 24

Value Proposition Customer Value Proposition DATA offering Document Management solutions Marketing Communications Stable operational and financial platform Customer Value Reduce costs Build revenue Avoid risk Market Differentiation Outstanding customer service; on time, full delivery of promises made. We do what we say we will do Customized, innovative products and services that provide enhanced value Capability to supply blue chip client s national and U.S. requirements 25

Value Proposition Strong Canadian Market Positions Over $150 million in annual Document Management revenue We provide services for the total document lifecycle Destruction Printing Archiving (paper or electronic) Destruction Archiving (paper or electronic) Data entry / extraction Filing (paper or electronic) Scanning Data entry / completed documents extraction Scanning Mailing completed documents Send for approval or filling Mailing out Filling out Send for approval or filling out Filling out Printing Creative / Design Document Creative prep and / review Design Document Administrative prep costs and review Administrative Warehousing / costs Archiving Warehousing Fulfillment / / Archiving Distribution Inventory Fulfillment / obsolescence Distribution Inventory obsolescence 26

Value Proposition Strong Canadian Market Positions Approximately $70 million in annual Marketing revenue Creative Design and Copy Marketing Campaign Management Call Center Services MARKETING Consumer & Social Media Data Analysis Fulfillment Fulfillment Printed Marketing Material E-Marketing web pages, e-mail, mobile 27 22

Value Proposition Blue Chip Customers Multi-year, multi-product contractual relationships Majority of top 25 customers > 10 year relationships No single customer > 5% of our total revenue 28

Value Proposition Strong Core Strong current product mix to leverage industry growth areas DATA s Product Mix aligns with industry growth areas: (see slide 29-32 for industry data) Labels Digital Marketing Solutions Digital Document Management Document Process Outsourcing 29

Industry Dynamics Research data supports our strategic plan 30

Industry Dynamics Evolving to blended digital & paper solutions, professional services and document outsourcing Increase in digitization Blending electronic and paper based solutions Increase in Professional Services Document Management technology solutions Marketing Services (content management, data analysis, creative design, program management) Increase in outsourcing of document related functions In-house printing, graphic design, scanning, archiving, call centers Decline in long run printed products Phone books, newspapers, catalogues, magazines, forms Sources: Infotrends: U.S. Document Outsourcing Market Forecast 2009 2014 (November 2010) Infotrends: Evolution of Document Process Outsourcing (February 2011) 31

Industry Dynamics There s growth if you know where to look! E-marketing growing 20% Outsourcing of document related processes growing 14.5% Digital colour printing growing 9% Data and content management growing 5.2% Pressure sensitive labels growing 4.8% Document print outsourcing growing 2.2% Direct mail growing 2% Sources: Kodak: Canadian Media Directors Council Media Digest, Statistics Canada Infotrends: U.S. Document Outsourcing Market Forecast 2009 2014 (November 2010) Infotrends: Evolution of Document Process Outsourcing (February 2011) Converting Quarterly: AWA Label Release Liner Industry (September 2010) 32

Industry Dynamics Opportunity for the right companies Customers are seeking help with increasingly complex, blended electronic and paper options Opportunity for trusted, innovative, single-source providers to expand Add new products and services for existing clients Take market share from slower moving competitors Sources: Infotrends: U.S. Document Outsourcing Market Forecast 2009 2014 (November 2010) Infotrends: Evolution of Document Process Outsourcing (February 2011) 33

Social Responsibility We are committed to employment equity We are committed to the environment We are committed to maintaining a safe workplace We support charities in our communities For more information on our programs visit www.datagroup.ca 34

Investor Highlights Summary Strategic Growth Plan to expand our business New product development in digital marketing and document management Selective U.S. expansion with existing clients Acquisitions to fuel growth, aligned with new product development Growth in revenue and gross profit YTD 2012 while continuing to invest in our future Moderate cap-ex requirements TSX symbols Shares: DGI. 23.5 million shares outstanding Debentures: DGI.DB.A 35

For more information: Michael Suksi PRESIDENT AND CEO 905.494.4006 msuksi@datagroup.ca Paul O Shea CFO 905.494.4002 poshea@datagroup.ca www.datagroup.ca TSX symbols: DGI (shares) and DGI.DB.A (debentures) 36

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